A time capsule of the greatest financial mania in the history of mankind, told in real-time by regular folks and patriots. May future generations better understand the madness of crowds, and how power and money corrupt.

March 07, 2008

Think back to the first Bush recession, and then the dot-com collapse and 9/11. Think about Ford's "Whip Inflation Now". Think about Carter's 444 days of incompetence. Think about the days surrounding Nixon's resignation. Think about the '82 Reagan recession.

I don't think we've seen the worst yet, but we are today seeing the signals that the worst will soon be upon is. Question is: what can we do about it? Not everybody can afford that underground bunker in the mountains that Dopes mocks HPer's for having...

Any time a republican is in office it's bad. The Carter years were far better than the Nixon/Ford years that preceded him. The Reagan years were ok, but then I was in my prime then so the devatstation he brought to so many wasn't on my radar screen.

Old enough to see it worse in the mid 70's as a very young man as it kept getting worse for a number of years.Problems today though, are much more complex and intractable as America no longer has the global economic preeminence it once enjoyed.Therefore it it will continue to get worse and last longer than most expect.Was able to learn from my previous severe downturn experience in the 70s, unable to find decent work for years after college, living mostly on the edge, (week to week), and postponing any lifestyle ambitions.Learned a lot from those days and never forgot them,which allows me and family to live in prudent "bulletproof" fashion. Absolutely no debt of any kind, total liquid positions, modest Manhattan income producing real estate and secure pensions.The silver lining perhaps in all this financial crunch, is to learn and use the experience to shape a sound economic road map for yourself.

Bad things may be going on now, but so are many good things about living on Earth now. Gourmet coffee from all around the world and, um... gimme a minute.. um...

Seriously, just think of past centuries on this world: slavery, complete lack of medical know-how, unreliable and slow travel and communications, deep pervasive illiteracy, no checks and balances in government - even dysfunctional C&Bs are better than none; the corrupt have to make some sort of halfhearted attempt to obfuscate their misdeeds, to limit their activities.

One unique bad new thing these days : rapid communications. you know the saying - "To err is Human. To really foul up..." An idea, for example, oh, just to pick one at random, "Houses always increase in value and are great investments" can be propagated all over the world in a flash, and lo and behold, 100 million house flippers are created. Ideas that appeal to greed need to experience a bit more viscosity in the form of critical thinking, partaking of the wisdom of elders, and consideration of "common" sense.

This country is headed for a disaster of biblical proportions. What do I mean by "biblical"? What I mean is Old Testament, Keith. Real wrath-of-God type stuff. Fire and brimstone coming down from the skies. Rivers and seas boiling. Forty years of darkness. Earthquakes, volcanoes... The dead rising from the grave. Human sacrifice, dogs and cats living together - MASS HYSTERIA!!!

As the old man around here, I have been throught the Jimmy Carter Stagflation 70's, the 1980 recession with 10%!! unemployment, crash of 1987, crash of 1998, dot.com meltdown, etc. Things always look bad from the middle of the storm, but the difference this time is MASSIVE DEBT!!!!. . .EVERYWHERE - Us Government Debt, Bank bad debt, personal bad debt, lot of corporate bad debt (but some corporations are hording money). . .where will this all end - I agree with one ANON who said, "life changing events."

There was a great article today - called "Can the World afford a Middle Class." Will try to find link later - basically said can India, China, Africa, Russia, etc. all have a middle class that consumes like USA? If so, USA will have to give up a percent of its wealth - prices for all commodities will be higher, and USA people will pay more and earn less. . .already hapening.

All we've got so far is that the mainstream media is acknowledging the pain in the financial universe. Many money pros have taken a beating, the general public will follow later, usually in the form of losing homes, losing jobs, losing basically everything. As far as the average Joe'n'Jane feelin' pain, we're just getting started.

Have a nice DEPRESSION, everybody. This will be one for the history books.

Oh, trust me, I'm not calling anything. I'm just saying when you look around today, it's never been worse

The BIG question is - what's next?

All of the people that I regularly share my life with think that this is business as usual. A bump in the road, no big deal, part of a cycle, blah blah. I am so goddamn sick of the denial.

I for one will be happy if what's next includes these people getting that blank TV stare out of their eyes. I would like to see fear. Cold to the bone fear. Then I will feel better. Right now everyone is like those stupid tourists on the beach with their cameras, clicking pics and watching the tsunami roll in higher and higher until it dawns on them how stupid they are and in a split second, no more smiles. Drop the camera and run.

It has been much worse than now, especially in the second dip of the double dip recession 1981-1982.

> Is this moment the bottom, or will it just get worse?

If this would be the bottom, it would have been mild indeed - but I fear that this time there is no fast way out anymore, and it will get worse for YEARS.

I have no idea how deep it will gonna dip, but we can guess something about its length:Housing is in its biggest bust ever, and the bust with its siblings, credit contraction and negative wealth effect, will stay with us for about five years after the peak, if historical comparisons hold, and drag the economy down. After that, it depends if we respond as the Japanese and loose a decade or get faster on our feet. My gues is the latter, that means economic bad times "only" until 2010.

I've seen far worse. Think 25 years of continuous slow economic downturn. Year after year the unemployment numbers were getting worse. People around you losing their jobs and not finding stable gainful employment ever again. Every once in a while we'd get a half decent year economically speaking and we thought maybe it was the end of the tunnel... and every time our hopes were crushed and it got worse. I didn't grow up in the US. What you people call the "bad times of the seventies" also lasted for all of the eighties and a good portion of the nineties in some parts of the world.I think what we're seeing now is nothing like that. Sure we're in a recession. It might even turn out to be a bad one. But I have no doubt we'll find a way out of it.

the problem is the extent of over leverage of bad debt...something not in play until recent

From the WSJ:

The financial turmoil is taking on a new dimension: Banks that lent money to hedge funds and other big risk-takers are asking for some of it back.

Loans from banks and brokerages had allowed hedge funds, which manage some $1.9 trillion in clients' money, to amass many times that amount in investments. But as the value of mortgage-backed bonds and other investments has dropped in recent weeks, the lenders are demanding that borrowers put up more cash or assets.

This is producing a negative cycle that has policy makers deeply worried. When investors rush to dump assets, prices fall and lenders feel compelled to make further demands, or "margin calls," which cause even more selling.

So far, the turbulence touched off last summer hasn't resulted in many big hedge-fund blowups. If that changes, banks and other financial firms could end up holding even more hard-to-sell securities. Already, their troubled investments, especially in securities tied to mortgages, have cost them some $140 billion in write-downs.

.....

The funds facing the greatest pressure are those that are highly leveraged, meaning they have large borrowings relative to the money entrusted to them. Carlyle Capital managed only $670 million in client money, but used borrowing to boost its portfolio of bonds to $21.7 billion, meaning it was about 32 times leveraged.

...and to think, with the very last amount left on their credit cards, people will buy that game jersey of a steroid freak kazillionaire ballplayer, or spend their last few dollars on an overpriced ballgame.

Then when they barely have two nickels left, they will somehow find a way to buy that National Inquirer on their way to spending their last dime on tickets to a lip-synching Ashlee Simpson concert, all the while wondering why they can't have the life of Britney, Lyndsey and Paris.

The one absolute truth is that America's hero-worship and false idolatry for celebrity is also the worst it's ever been.

My point isn't about celebrity worship. My point is that it's just another barometer for what the hell is wrong with his country.

Times aren't bad unless you are unemployed from the fake banking and real estate economy.

I am doing fairly well in a stable job producing something of actual value and renting while I wait for house prices to plummet into the abyss. In a year or two I'll buy a forclosure for pennies on the dollar paying cash without the assistance of a bank loan or realtor.

I wonder what the tens of millions of illegals will do now that the US economy has crapped out and the dollar is crashing vs the peso and real. I bet many of them lived the high life on the easy credit and will now abadon their McMansions and credit cards. I hope Bank of America gets screwed the most

I wonder what the tens of millions of illegals will do now that the US economy has crapped out and the dollar is crashing vs the peso and real. I bet many of them lived the high life on the easy credit and will now abadon their McMansions and credit cards. I hope Bank of America gets screwed the most

It's gonna be bad for a lot of people. Those that hang onto their jobs probably won't feel it too much. People live in their own oblivions. All of the long-term temps we had at our company have been let go. I feel bad for them. Most of them already worked 2 jobs. It's just a matter of time before they start slicing at other jobs.

I still see new Hummers and Benz's on my wannabe street. I also see a steady traffic of cars driving by the neighborhood house "deals." I still see young teens drinking $4 of FAT from Charbucks. Being frugal is becoming "fashionable," not a necessity. I'd say the economic indications couldn't be worse, but the normal folks are the last to figure it out. If you lived with depression-era parents, frugality was a way of life.

I saw a former co-worker today at a conference. I don't think he even follows the financial world, but he told me that he had a dream that Mexico is hoping that the U.S. builds a decent fence at the border to keep bankrupt Americans from fleeing into Mexico once things get bad here in the U.S.

Worse? Maybe. My family and friends will always have a warm place to sleep at my house.Better? Definitely. Let's move to a post-consumer society already. Let's focus on the truly important things: family, friends, the environment. Just Imagine.

I was a little kid in the 1970s. They were worse than this moment. We were poor as sh*t. I had like one pair of jeans and three shirts - one of which was a Vietnam T-shirt that said, "Special Forces - Kill 'em all and let God sort 'em out."

My friend and I used to put 15 cents in the sidewalk box, and take ALL of the newspapers. Then we'd go sell them on the gas lines - people sometimes had to wait on line over an hour just to get gas in the early mornings.

Meanwhile, the Russians were going to nuke us anytime. We'd have air raid drills at school once in a while, where we'd have to go out in the hall, get down on our knees and curl up in a ball. How that was going to save us, I don't know. Probably it was just supposed to scare us and make us obedient flag wavers.

Meanwhile, the entire South Bronx was on fire.

The 1970s were a nightmare. This thing we have now, this horrible beast, is just getting rolling, and will probably one day be orders of magnitude worse than the 70s. But most people I talk to aren't even fully aware of this yet. And that's because it isn't all that bad yet.

I know lots of people still prattling on about their bright futures in this field or that.

The last two years of the Carter administration were worse than today. We've only matched the price of oil then this week, for example.

But this unpleasantness is only getting started. Also when inflation was flurting with 20% in the late 1970s, the company I worked for gave us a 10% raise -- every SIX months. (Today that same company has French owners who cut everyone's pay by 10%) The company I work for today is privately held, but it is constantly pursued by foreign buyers (mostly from India).

So I expect soaring prices but we'll be paid in shrinking American dollars and won't be seeing any raises. More likely paycuts as our employers are bought by foreigners with too many dollars to get rid of.

Born in 1951, I've lived through the 70s stagflation and gas crisis, the first job losses in manufacturing in the 70s and 80s Rustbelt, the stock market wobble in 87, and the housing market crash in the early 90s.

Today I pulled in to Gold's gym after work. A young lost-looking white guy outside asked for help w/ food. He's like "man - I'm on the streets". I spotted him a five. In 5 yrs this has never happened in this area.

have I seen it this bad? damn grow up in a small MA hilltown where the dairy farms go under, move into the small mill city in the valley just to watch the mills close, that was 1983, a time of 9% unemployment.

That is where is suspect we will be in January, then go down from there.

Nice to know you've learned something from hard times in the past, but self-preservation is what got us into this mess, time to think outside our own confort zone.

seniorsavvy said... Old enough to see it worse in the mid 70's as a very young man as it kept getting worse for a number of years.Problems today though, are much more complex and intractable as America no longer has the global economic preeminence it once enjoyed.Therefore it it will continue to get worse and last longer than most expect.Was able to learn from my previous severe downturn experience in the 70s, unable to find decent work for years after college, living mostly on the edge, (week to week), and postponing any lifestyle ambitions.Learned a lot from those days and never forgot them,which allows me and family to live in prudent "bulletproof" fashion. Absolutely no debt of any kind, total liquid positions, modest Manhattan income producing real estate and secure pensions.The silver lining perhaps in all this financial crunch, is to learn and use the experience to shape a sound economic road map for yourself.

"I know this is a difficult time for our economy, but we recognized the problem early, and provided the economy with a booster shot," President Bush said at the White House. "We will begin to see the impact over the coming months."***********************

Yea, we need to send a booster shot all right, like right up King Bush's #%@!

The most important question to fool the sheep is: Where's Clinton? How many times has Clinton said the word "I" in a speech? What would Jesus do?

Oh, and this is for you who keep drinking the Obama Kool-Aid (not you Clinton Haterz because you're just irrational and mentally disturbed):

AP -- Former Obama adviser says Iraq commitment 'best case scenario'

A former adviser to Barack Obama, who resigned Friday, said Obama may not be able to withdraw all U.S. combat troops from Iraq within a year as he has promised on the campaign trail.

Power's comments about Iraq came in an interview with the BBC. She said Obama's position is that withdrawing all U.S. troops within 16 months is a ''best-case scenario'' that he will revisit if he becomes president.

So Obama is for keeping troops in Iraq, sucking taxpayer money that benefit secret society cronies, while American soldiers die and leave their families bankrupt back home, and while you work your a$$ off to pay the war bill.

No surprised here since Obama has surrounded himself with "advisers" who are Skull & Bones members, like both Bushes. Are you going to turn your head away, like a little blind sheep, believing that Obama is your Messiah?

First, Obama's economic adviser, Goolsbee, a Skull & Bones member, meets secretly with Canadian officials to make promises to sell the country cheap, while Obama is lying at the same time to OH workers that he's against NAFTA. Then, another of Obama's advisers confirms that he's not going to withdraw from Iraq. Why don't you just face the mountain of evidence in front of you and wake up, sheep?

Its still just getting started. There are so many average people who would only gamble at the $5 blackjack table but were willing to get these crazy loans on so called investment properties. I'm just not sure how all these bank owned homes will be sold. In Los Angeles the bank is only discounting a 500,000 home to 400,000. So the bank owned homes are piling up. I brought a house in 99 for 200,000 and sold in 06 for 720,000. I felt in 99 i over paid because in 96 those houses were selling for 130 to 150. Wait until people start losing jobs. The housing price are just starting to go down.

What is your take on what the banks will do as they hold more and more homes. Right now they are not negotiating realistically. In my formula $100,000 salary can only afford a 30year fixed $250,000 mort. How many people in Cali, Nev etc make that kind of money. I have a fireman friend who makes 100,000 and have a crazy loan at 480,000. It just a matter of time before his option arm expires.

It's not the worst I've ever seen, yet -- the S&L bust and the '70s' oil crisis were bad. But it's going to get worse. I agree with those who believe that everything about our daily financial lives will be much different - worse - for at least the coming decade.

I have great credit, alot of money in the bank, and a decent job.My ambition is to buy a house in a nice town, put down roots and really become part of a community.I've been saving and waiting for prices to come down since 2004.At that time, I was stunned to learn that a buyng frenzy of get-rich-quick schemers had caused prices to triple since 2000 in a town I was considering. I ABSOLUTELY REFUSED to spend my life savings and go deeply in debt so that someone could get an enourmous unearned profit. I was given the fear/greed sales pitch: "buy now or you'll be priced out of the market forever / buy quick, its not too late to get in on the easy profits" Bull!

I decided to save and wait for the market to correct itself. Until recently I thought my patience would pay off. Prices started to inch down, and my savings were growing.

Now, however, I am actually scared for the first time since this craziness began. The Federal Reserve is cutting interest rates and Congress is pushing foreclosure prevention legislation, all with the openly avowed goal of propping up house prices at their current level - and with little concern for the resulting inflation.

THE TIME FOR PATIENT WAITING IS OVER!

The Fed will erode the savings of everyone responsible enough to have saved towards a 20% down payment and Congress will increase the tax burden on the entire country for the benefit of the foolish few. But worst of all, they might transform the housing bubble - which could have been a regretable but temporary phenomenon - into a permanent paradigm shift (larger house price/income ratio. For the majority of the next generation, that will mean a choice between being a tenant or a debt peon) . . . IF WE LET THEM!

THE TIME HAS COME TO PETITION CONGRESS FOR A REDRESS OF GREIVANCES!

Every single member of congress needs to be flooded with petions denouncing all government intervention which tends to bolster housing prices at their current ludicrous level.

Keith, thanks for the blog. It is informative and entertaining, but personally I am in no mood to "sit back and enjoy the show". I am in the mood to fight like hell. If any of you know of a group "Future Home Buyers of America" I could join, please let me know. If no such group exists, we should start one.

We are in uncharted territory.The nothugs have raped the land and looted the treasury, with the sheep rooting them on.Humans are cognitavely irrational, using heuristic logic to make decisions that helped them with evolutionary fitness. These are now liability, and we must live with irrational behavior, religion, and superstition.No one said late stage capitalism was going to be fun---

Just pay attention how, as the situation gets worse, there's an increase in violent crimes everywhere. Did you hear about two student girls in NC who were brutally shot several times? You'll see more and more cases like this:

AP -- Rescue officer shot dead in the back in 'random' shooting

A man dressed in a sports jacket and holding his gun sideways, as in a gangster movie, sprayed a Wendy's with bullets Monday, killing a fire rescue officer who had returned to the restaurant to collect a missing promotional toy for his child, authorities said.

The assailant -- identified by authorities as Alburn Blake, 60, of West Palm Beach -- wounded four other people before turning the 9mm handgun on himself and committing suicide in the fast-food restaurant a few miles from his home.

''My sister tried to run away, but he shot her anyway,'' Kachi Soto said of her 16-year-old sister, Vanessa, who was struck by a bullet and hospitalized.

The rampage came without warning, without apparent provocation and without a known motive, authorities said. The gunman said nothing and had a blank look on his face, but his hands were shaking, according to witnesses.

Well, I've been telling you all since the beginning of HP to follow Schiff's book, invest in precious metals, foreign currencies, organic farm with a bunker in the hill of some country overseas that's rich in natural resources. The prez got his in Paraguay already.

keith said... Frank - I was referring to the first Bush recession - think George W's daddy. The one that cost him the 1992 election.

And yes, the dot-com recession was Clinton's doing with a hat-tip to Greenspan

I think this recession is George W's first, and boy, it's ______________________________________________________________________

See...that's I mean about Frank. He is just a little less annoying that DOPES. Seems like he wants to be a cool dude, and in the know but always seems to be a little off base. Hang in there man we know it takes time to get over a trumatic experience.

Well, the employment situation is going to get worse no doubt because of people pulling back and they are in to much debt,causing employers not to hire and down scale .

The loss to the lenders will continue as real estate prices crash even more and we have a over supply of homes with little demand combined with a tight lending market . I don't think people will even buy now even if the government offered no down loans at 3% fixed because people are afraid of losing their jobs or inflation making them not able to afford their payments. Debt is bad now ,and everybody has big debt .

That fact that Corporations say that they have a great market in global markets is not going to help the Americans ,especially when the Corporations won't give good raises to the American workers because they now have to compete with slave labor from other countries and lose jobs because of out-sourcing jobs. To bad the Corporations can't see that giving jobs to Americans will allow Americans to spent money in America ,that will than create more jobs .

The government is more concerned with bailing out the lenders ,(for reasons they can't explain fully) or borrowers that were part of the big loan fraud ponzi-scheme ,so no help from the government on doing the right thing .So somehow that tax burden is going to be passed on to the poor middle class that is getting poorer by the minute with the Fed policies that aren't curbing inflation .

So,the prospect of a speedy recovery of the economy or of housing prices is grim .

So I predict that this recession will move into a severe recession unless the Fed Chairman and the power that be start doing the best moves for the American middle class,and restore good jobs for Americans quick .That might mean that Corporations might have to need a different attitude than they have had for a while now ,like how to fleece America and not pay any taxes and not give any raises, out-source jobs , and tell everybody you can't afford anything ,yet declare record profits to the stockholders .

So, I guess it's going to get worse .So, you don't believe were on the eve of destruction .Course years ago my generation thought the same thing ,but shit in the final analysis we had good jobs to go to .

A statistician may tell you that you need to see a few data points headed in the same direction to identify a trend (reversing from the bottom) 3 months of increasing sales would be a good indicator...

However, we don't have a single data point in that direction - the bottom is no where to be seen. To the contrary 10 data points headed South is a severe trend (Normal variability is lost in this data set)

I'm 33 so I don't remember the 70s or early 80s economically speaking. I got laid off 3 months after 9/11. I was working for a software company which was going downhill pre 9/11 then used 9/11 as an excuse to get rid of 60% of its employees over 6 months.

Luckily I found another job within 2 weeks, which actually paid more. So personally speaking that recession almost didn't exist for me.

Now I work for myself and make more than 250% more than what I made 6 years ago. So far things are still going great...so far. Who knows what tomorrow will bring, but I don't see any evidence of a lack of work coming anytime soon. Even if things slow down and I have no work for 6 or 12 months or even 18 months, I have enough stashed away that it won't be the end of the world.

Plus I am renting and seeing home prices fall daily which as I see it is equal to income. If I can buy a house next year for $150K less than last year, it is the equivalent of having earned an extra $75K a year, tax free.

when people elect hot temper McCain who freaked out at reporter, as president, then we are going to see next worstest 4 years. we had stupid and incompetant Bush for 8 years. do we need emotionally unstable McCain for 4 years. We will know if J6P still smoking cocain or opium during election.

My grandparents' financial attitudes were permanently impacted by the Depression-era 1930s and they helpfully related those harsh experiences to their grandkids. My financial instincts were shaped by their stories and my own experience as a kid during the Depressing Era: the 1970s. So I've always deplored debt yet always remain optimistic for the future, because America always recovers and resurges. Eventually.

Those whose expectations were shaped by the Go-Go late 1980s-90s-2000s, are in for a rude surprise -- even if our economy does not degenerate to the depths of the Jimmy Carter-era 70s.

Economies, including housing, don't always go up-up-up. Never have, never will. And even a modest downturn is devastating if you live on the financial edge. A painful lesson to learn the hard way.

Am not convinced we're in for an economic Armegeddon as severe or worse than the 1930s. Am not convinced we're in for a replay of the 1970s, either.

Do think the Go-Go era is Gone-Gone. For the next couple of years, at least.

People who don't have sufficient cash or liquidity to live off of for at least six months - at least - need to immediately make that a top priority. People who haven't changed their assumptions by now, are ignorant.

The 1970's was no where near as bad as today. You still had industry, and the boomers were not running the show.

And only a stupid baby boomer would quote the fraudulent unemployment rate of 4.8% as proof we are doing fine. Real unemployment has to be triple that number, maybe higher.

The world financial system has $700 trillion in derivative obligations, there is no way to pay that debt. Declare the system bankrupt and wipe off the derivative debt. It is ficticious and it shouldnt be given any standing.

The Carter years were far better than the Nixon/Ford years that preceded him.

---------------------------

Perhaps, but the 444 days of incompetence showed that the better years were not due to something Carter did. I think Carter probably suffered from "analysis paralysis". Lots of good ideas but unable to make a decision.

It will get much worse and "diversity" in America will be the undoing of the nation. In the depression of the 30s for the most part people had an alliance to the nation and cared for the well being of things. Now instead of having this mentality people are all about me me me. Whatever group it is ..blacks mexicans asians women gays etc...

Everyone in America has their own agenda and they do not care about anything else so long as their needs are met.

A depression and breakdown of industrial scale agriculture and shipping will require people to cooperate at local levels for survival. You can forget about that....I've never seen such antisocial behavior in the aggregate in my lifetime.

As soon as the grocery shelves get empty and the gasoline can not be purchased at any price it will get ugly fast. I think the govt. will cut these supplies to the poor areas first because they can crush people who don't have money and political power at the drop of a hat.

There was a great article today - called "Can the World afford a Middle Class." Will try to find link later - basically said can India, China, Africa, Russia, etc. all have a middle class that consumes like USA? If so, USA will have to give up a percent of its wealth - prices for all commodities will be higher, and USA people will pay more and earn less. . .already hapening.-------------------------

Looking forward to the link. I have often pondered this. There aren't enough resources in the world for everyone to consume like the USA.

Are you guys joking? Are things the worst now? I grew up in 70's Detroit, and things are just fine compared to then...We have had so many good years that a lot of people have forgotten truly hard times and a lot of people aren't old enough to know "tough times".

Bush is the worst president ever? Not even close, how about Jimmy Carter?

IF THEY ISSUED 20 DOLLARS OF DEBT DOLLARS FOR EVERY DOLLAR IN THE BANK, SOMEONE WHOSE DOLLAR THAT WAS IN THE BANK MUST BUY A HOUSE FOR PENNIES ON THE DOLLAR JUST TO BREAK EVEN ON THE PURCHACE POWER LOST.....IF THE HOUSES WERE BOUGHT WITH DEBT DOLLARS.

I'm less afraid of it getting worse than I am of it never getting better. If "worse" means a necessary but temporary period of readjustment so we can get back on track as a nation, then I don't fear it and even welcome it in a way. The real fear comes from this gut feeling that we've gone too far astray this time and we may never be able to turn it around.

Yesterday, I just witnessed my first candid discussion of one person walking away from his mortgage. I was waiting in line and heard two people talking six feet away about how mathematically, he has to walk away from the house. He tried to sell it, and couldn't pull it off.

My last non-negative candid overhearing about housing was in December when two guys were discussing about hope: in a certain neighborhood they'll be able to sell a new custom home for an okay profit. The second guy seemed to be neutral and trying not be negative.

I don't get out much, and I would guess 25% of discussions I hear are about housing.

Worse, better...whatever. Does it matter? Seriously? Does anybody really know what is coming down the pike?Has anybody given some thought to the possibility...however remote, that this whole collapse might be engineered from the beginning?

What's the purpose to this collapse if everybody is going to get burned? And I do believe that EVERYBODY will be impacted by this inevitable event.

Have gold? Who cares. Have FOOD and water would be much more appropriate. Have a job? Care to feed the rugrats?

We're headed towards war, the likes of which will make WWII look like a jovial walk in the park.Yes, WAR, as in GLOBAL war. Its the paradigm shift that will change everyone's life and expectations. What will you care what happened to the housing market once the threat of war is at your doorstep.

Enjoying these last couple of months of relative peace (forget prosperity...its through).

As the elites have always said...reduce the world's population... It shall be done...

This Americano nation and its citizens, occupants, dwellers are low, pitiful, pathetic and all at once despicable !!!

How can you call yourself the greatest nation on Earth when dishonor, divorce, immorality, greed, cheat is every day's code of conduct, the way to conduct business in the land of the Snapper Turtle ???

Look around you: What do you see ? Fat-ass Americano male and female driving that chicken-coop, pig-raising SUV or F350, for what I may ask ? So you can feel big and powerful, huh !!!. Here is a suggestion if you want to feel almighty, big, and powerful: Go and invade Red China, right now, at this minute, and see what the result may turn out to be.

As I have stated over and over again: This land of the Fat-Ass Americano Homosexual Erectus is a cesspool of sewage now. And to add insult to that, the Americano is being slowly roasted nicely over a bed of white hot charcoal, skewered from mouth to ass like a Snapper Turtle, juice dripping down, fat oozing, sputtering, succulent flesh aromatically wafting hungryly in the air.

Americano Homosexual Erectus == Roasted Snapper Turtle !!!

Go Hick, Hillbilly and Cracker Nuthead. Party all you can while the going is still good. Drink that Cold Mountain rotgut moonshine until you puke your snapper turtle gut out. The doomday is coming and it will judge you and your heathen crowd harshly.

I remember the late 70's. I had graduated in 1977 with a mechanical engineering degree. Although. my grades were good, I had a tough time trying to find a job - nobody was hiring engineers.

Somehow though I knew I could have a decent job (not a McJob) and still make progress to owning a house - and with a total cost for college of $3000, I didn't have to worry about debt.

I started working at a place that repaired specialty equipment, became a technician there and then moved on to other companies. All the while I was putting money away.

My kid graduates college this year with a finance degree and it pretty much looks like he will have a $80k+ debt from school even after a 30% merit scholarship, no job prospects doing anything meaningful towards a career in his field. His best choice is to sit and study for the GMAT so he can get into a good MBA which will set him back another $50k.

What's next? Probably a world war. Unfortunately, I'm not so sure the US will be on the right side. I'm inclined to agree more and more with Russia on foreign matters than our current Bush administration. I only hope Bush and his lacky Condolesa Rice aren't in long enough to ignite Armegeddon.

Remember, debt is just paper. We can always hit the reset button and start over. We just won't be able to borrow for awhile.

Ummm... yeah... let's just have a little thought experiment shall we?

Suppose I'm a hard working soul who's managed to sock away $500K over the last 20-30 years and hope to enjoy some type of decent retirement after all those years.

So along you come and press the reset button leaving me peniless.

So what am I supposed to do? Start over and work another 30 years?

And pray tell... why the F@#K would I trust the new toilet paper that you issue? Why not press the reset button again after another 30 years so I'm peniless again?

Are you starting to catch on yet?

THERE IS NO RESET BUTTON!!!

You wipe out the dollar and you really have no reason to keep the US around do you? Would you ever be such a moron and trust anything that was printed in Washington ever again?

And after wiping out a lifetime of earnings... what exactly do you expect these people to do? Do you really think they're just going to sit there and starve? And not take out their shotguns and shoot back?

Oh yeah... silly me... that's what all those concentration camps are for.

I don't wanna sound like Chris Farley but, remember when I told you a few months back that the next shoe to drop was mass unemployment?

BusinessWeek -- Dangerous cracks appearing in job market

Dangerous cracks in the nation's job market are deepening. Employers slashed jobs by the largest amount in five years and hundreds of thousands of people dropped out of the labor force -- ominous signs that the country is falling toward a recession or has already toppled into one.

For the second straight month, nervous employers got rid of jobs nationwide. In February, they sliced payrolls by 63,000, even deeper than the 22,000 cut in January, the Labor Department reported Friday.

The grim snapshot of the country's employment climate underscored the heavy toll the housing and credit debacles are taking on companies, jobseekers and the economy as a whole.

The unemployment rate actually dipped slightly from 4.9 percent to 4.8 percent, as 450,000 people left the labor force for any number of reasons. Economists thought many people probably gave up looking for work.

In the economy the late '70s and early '80s were worse by a wide margin. But people in general are such pussies these days, they miss one breakfast and start ranting for help from Congress.

What worries me are the large numbers of kids with no moral foundation. They live for the moment and narcissism is their religion. God help us all when they get turned loose on society to fend for themselves.

Towards the end there was a lot of excess speculation, but there still was a there there. Anyway you look at it real value was being created. I read somewhere that half of the old dot-com companies are still around, employing people and making money. Their stock was over valued, but the underlying fundamentals were sound enough for them to survive.

"I wonder what the tens of millions of illegals will do now that the US economy has crapped out and the dollar is crashing vs the peso and real. I bet many of them lived the high life on the easy credit and will now abadon their McMansions and credit cards."

I know a former illegal, he lives at home with his parents as does his unmarried brothers and sisters. After thirty years of working and saving, the dad owns the house free and clear. Guy my friend, owns a contract manufacturing company (as in value added vs value extractive). His business actually increased in the last recession as companies turned to him to reduce costs. Somehow I think they'll be okay.

I am 64 this month, and I've been aware of history and politics since my parents realized I could talk. The McCarthy times were frightening, even to a child. People talked about each other, and on the nice street of post war homes whereI live with relatives for 2 years, a house sat empty for many years because neighbors had driven them out, for being Communists. Were they, I never knew, nor would I have wanted them treated that way. My grandfather (five foot four) was tarred and feathered for trying to organize farmers against banks in the Depression. Of course I wasn't there. I am aware of the shadow of this country in its myriad forms, but I think the biggest shadow this country has, honestly, falls under the umbrella of one thing: we don't seem to want to think things through to a deep level; it's not exactly about education, it's more about attitude. It's a long shadow.

But of the times I've lived through, the implications and most likely ramifications of what's going on now and recently may lead us to the greatest crisis this country has ever known, bar none.I do not see how we can skate; and maybe that's what's to be garnered: may as well look at the truth as best you can decipher it early on, because it will be faced. Face small consequences as you go along and they may not grow to behemoths.

Too late now I think. Credit is the undoing, whether it's about houses or derivatives, or using credit cards to keep small business afloat. We have listened to inexperienced, over enthusiastic fools, and that is on us.

Two years ago, for one yearI worked one afternoon a week for a woman who had a small mail order business, which she had painstakingly built up over 30 years. Her house was paid for, based on a small mortgage from 30 years ago, and no remodeling or seconds. She had a little cash flow so she bought a tiny house to move her business to, at probably 2-3 times the mortgage of the first house. Her bookkeeper told her it was all about cash flow. She bought another little house for slightly more than the second, with a lovely yard, organically gardened for years. She sold the first house to her newly married son on contract and he had to get a roommate for $500/room to help pay the payments. Now all over that city, there are ads galore on craigslist for similar roommates wanted, 3-4-5 per house. So no one can afford the payment alone? When does your particular string get pulled?

A local paper had a story about a young hip couple opening a restaurant in their house by subscription, which led to a real location, followed by a second restaurant and mention of a 3rd. This was during the time a child was born..let's hear it all together: and then they got divorced....and if anyone had mentioned overcommitted, too much, any kind of doubt, you would have been checked with hostile choruses and accusations of being a slacker, unambitious, old-fashioned, out of touch, or just 'be quiet'...

I am poor. But I know I am poor.My financial life fell apart some years ago, and I couldn't get it back together as before. One day, I just saw that it was going to be that way for the foreseeable future. And I said to myself: I am going to be very poor and I must prepare myself for that. I will cherish a single dime, and I willfind out what is possible. Well, I had a series of 10 cent miracles you wouldn't have believed.And creativity is worth it's weight in gold. And 10 cents on the dollar in hard times can get you what you need. Do I think it's going to be like that for most people. Yes I do.

Go back down the technology chain to save money. Make 3 meals out of a chicken, two for yourself and one or two for your cats.Meal one, roast chicken, Simmer all leftovers next day. Cut chicken off bone, save tiny scraps for cats with a little broth. Add vegetables and make soup. Don't have noodles or gas in the car? Use 2/3 cup flour, one egg, pinch salt and bit of oil. Knead and roll thinnnnnnnn. (oil helps that.) slice and make noodles. Soup for at least 3.

Better yet, get three chickens a one day old and some medicated feed for the first few weeks. Find out how to raise them safely. Check them daily several times to clean quarters and keep healthy and so they will bond with you. At 20 weeks you will have about 5 eggs per week per chicken. You can do a great deal to stretch food with eggs. Do not kill the chickens. Those eggs will be worth more than 2 lousy meals.

Most of you will find this advice over the top...just keep it in mind as something that might be useful.